Updated: Nov 1
In modern times, it is extremely common for adults to live in apartment buildings, especially younger adults. However, this wasn’t always the case. In this blog, we are going to provide a brief explanation of the historical evolution of multifamily properties and go over their track record as investment vehicles over the years.
The 1800s is the century in which multifamily properties really started to come into heavy use in America. Prior to the creation of multifamily properties that contained separate, individual apartments for families, in one building, most people lived in tenements. Tenements were similar to apartment buildings, except they often were smaller and had shared bathrooms. Oftentimes these bathrooms were located outdoors, separate from the buildings. Also, up until the 1840s, they did not have running water.
So, when the first multifamily apartment buildings arrived in the mid-1800s, they were considered a major upgrade to traditional tenement buildings. The first multifamily apartment building the was built in America was built in the 1860s in New York City. It was a 5-story building with 16 units and had what were at the time considered luxuries: private toilets and running water.
This building was a major success and soon, many other similar buildings followed suit. As the populations in major cities like New York, Boston, and Philadelphia began to swell in the late 1880s, there was a tremendous demand for multifamily apartments for the middle class. People who could not yet afford to buy their own homes wanted a respectable, clean, and private place to live. So, more and more multifamily homes started to be built.